Oil production at Kazakhstan’s Kashagan field won’t start before late 2015

Oil production at Kazakhstan’s Kashagan field won’t start before late 2015

Astana, Kazakhstan, July 2

By Daniyar Mukhtarov - Trend:

It will not be possible to start oil production at Kazakhstan's Kashagan field before late 2015, the country's Oil and Gas Minister Uzakbai Karabalin told reporters on July 1.

The minister specified a number of objective reasons for this delay.

First, the ice conditions create difficulties for developing the field, according to Karabalin.

"The ice is adrift in the Kazakh part of the Caspian Sea; it drifts for 500 kilometers and creates hummocks. We are aware that many world oil companies operate near the Arctic Circle, but there flows a warm current - Gulf Stream - and there is no ice as we have," he stresses.

"Additionally, the high concentration of hydrogen sulfide and high reservoir pressure makes the situation difficult at Kashagan field. In one word, there are many challenges, and all of them have been concentrated in one field - Kashagan," the minister said.

Karabalin stressed that in autumn of 2013, when the field was put into operation, it was ascertained that all the wells operate normally, all the installed equipment operates properly both on the mainland and on the island.

The minister went on to add that under the circumstances, when there are cracks in the pipeline, no one will start the oil production unless all the problems are completely eliminated.

Karabalin stressed that it will take time to replace all the pipelines that run from the island to the mainland.

"Note that the Kashagan field is located in a conservation area which accounts for 75 percent of sturgeons. There are also nesting sites of waterfowl. And under the law, oil producing companies of the international consortium that conducts the development of the field, are allowed to work after the chicks hatch out. That's to say, we may work only after the chicks hatch out and continue our work until the start of the ice-coating process.

As you can see, we have to limit ourselves in terms of timeframe," the minister said.

The oil minister underscored that the next delay in the oil production at Kashagan field will have serious impact on the country's economy.

"We expected to get additional eight million tonnes of oil from Kashagan field this year. We failed, but it doesn't mean that our economy has started to collapse. We simply couldn't get what we expected and we should work hard to ensure a reliable and long-term operation," Karabalin said.

He went on to add that currently, the negotiations with the contractors on finding the ways of changing the situation for the better are underway.

Both of the pipelines, on which gas leak was detected, require a complete replacement. Currently, the operator (NCOC) is engaged in developing a plan for the complete replacement of the pipeline by mid-2014.

A plan will be developed to replace the pipelines taking into account the possibility of an early resumption of production. As a precaution, in order not to lose time, the consortium has already launched a tender process to purchase pipeline segments.

Previously, it was reported that on June 1, 2014 the participants of the North Caspian Sea Production Sharing Agreement (NCSPSA) signed a memorandum of understanding with Kazakhstan to further develop the stages of completion and mining of the Kashagan project.

Oil production at Kashagan field started on September 11, 2013. However, on Sept. 24, the usage of the field was suspended due to a gas leak on a pipeline running from the D Island to the Bolashak Integrated Oil and Gas Plant.

The pipeline sections were supplied by two Japanese companies - Sumitomo and JFE, and the Italian company Saipem was engaged in laying the pipes.

Experts found out that the sulfide stress cracking was the immediate cause of the pipeline leaks. The sulfide stress cracking was itself caused by unforeseen increase in hardness of the metal at very small sections of the pipeline.

The resumption of production will depend on the results of the research, which should be available by late Q2.

The project participants are: KMG Kashagan B.V., AGIP Caspian Sea B.V., CNPC Kazakhstan B.V., Ex.xon Mobil Kazakhstan Inc., INPEX North Caspian Sea Ltd., Shell Kazakhstan Development B.V., Total E&P Kazakhstan.

NCOC is the operator under the North Caspian Sea Production Sharing Agreement, acting on behalf of the North Caspian Consortium.

Edited by CN

Georgia shares data on trade turnover with EU countries
Georgia shares data on trade turnover with EU countries
Georgian National Bank reveals volume of net profit made by lenders
Georgian National Bank reveals volume of net profit made by lenders
Georgia's Batumi sees decrease in real estate transactions
Georgia's Batumi sees decrease in real estate transactions
Loading Bars
UK retail sales make weak recovery in December
Ford to recall 3 million vehicles for air bags at $610 million cost
Georgia shares data on trade turnover with EU countries
Georgian National Bank reveals volume of net profit made by lenders
Uzbekistan’s service sector suffers most amid COVID-19
Bus production significantly decreases in Uzbekistan
Turkmen company shares data on annual production of flour
Friendship wins in Caspian - Azerbaijani President announces innovations in energy sector
Gold price in Azerbaijan declines
Turkmengas opens again tender for maintenance of gas turbine generators
Kazakh Gas Refinery opens tender for spare parts manufacturing
Azerbaijan to launch local remote conference call service
Georgia's Batumi sees decrease in real estate transactions
Uzbekistan’s 2020 gas exports down amid COVID-19
Azerbaijani currency rates for Jan. 22
TAP reinstates olive trees, dry stone walls in Italy
Two options for future dev’t of Dostlug oil & gas field in Caspian
Maldives thanks India for sending a consignment of 100,000 doses of Covershield
Dominica PM writes letter to Narendra Modi, seeks COVID-19 vaccines for citizens
Dostlug project may inspire fresh talks on Trans Caspian pipeline – Rystad Energy
Chevron likely to see its 2020 capex fall by 25%
Uzbekistan reveals COVID-19 data for January 22
Biden’s plan can lead to massive acceleration in investment in renewable power
Iran shares data on imports of basic goods
Iran to offer assistance to auto industry
OPEC+ and Pandemic Path Remain Key Oil Price Drivers
Four advantages of Dostlug oil and gas project
Oil prices fall as China's surging COVID-19 cases trigger clampdowns
Azernews newspaper reports ecological terror committed by Armenia against Azerbaijan during 30 years of occupation
Azerbaijani FM held a number of meetings during his visit to Turkmenistan
Foreign ministers of Azerbaijan and Turkmenistan held meetings
President of Turkmenistan receives Azerbaijani Foreign Minister
Azerbaijani, French FMs exchange views on various issues
Georgia Hualing FIZ to keep lowering operational costs for businesses
Georgia successfully implements energy projects despite COVID-19
86 illegal migrants rescued off Libyan coast
Turkey registers more than 6,200 new coronavirus cases
Export of cigarettes from Georgia to Azerbaijan down
Kazakhstan boosts petroleum oils exports volume to Croatia
Big part of lending for households in Azerbaijan accounts for national currency
EU Parliament President: EU to support Georgia in fight against Covid-19
Number of new COVID-19 cases up in Kazakhstan
New joint projects between Azerbaijan, Russia to increase mutual trade turnover
Brazil sees 1,316 new COVID-19 deaths
Azerbaijani oil & gas sector sees more investments in 2020
8 die in blast in India's Karnataka state
Algeria reports 246 new COVID-19 cases, 104,852 in total
Biden lays out plans for COVID-19 testing, vaccinations and masks
48 arrested in anti-mafia operation in Italy
Two megaprojects to be launched in Iran’s petrochemical sector
Czech parliament extends state of emergency until Feb. 14
Vehicle re-export from Georgia down in 2020
Azerbaijan unveils data on production of vehicles for 2020
France boosts imports of petroleum oils from Kazakhstan
Turkish firm develops quick sterilization device against COVID-19
For many years, Turkmenistan and Azerbaijan consistently developing relations in widest range of directions - President of Turkmenistan
Signing of Memorandum marks fundamentally new stage in energy cooperation between Turkmenistan and Azerbaijan in Caspian Sea - President of Turkmenistan
Transport and logistical cooperation between Azerbaijan, Turkmenistan will reach even higher level - President Aliyev
Signing of Memorandum on “Dostlug” field is result of many years of consistent action by our countries - President of Azerbaijan
Caspian Sea is sea of peace and good neighborliness - President of Azerbaijan
Signing of memorandum on “Dostlug” field is significant event that will have positive consequences - President Aliyev
Today's signing ceremony opens new page in development of Caspian's hydrocarbon resources - President Aliyev
Iranian government hopes for changes in new budget bill
Azerbaijan, Turkmenistan starting joint work on development of field in Caspian Sea for first time - President Aliyev
Russia remains key consumer of Uzbek vegetables and fruits
Georgia increases oil imports from Azerbaijan
Iran exports 12m euros worth of fibers in eight months
Azerbaijan plans to hold first auction on renewable energy sources this year
Easing monetary policy contributes to multiple growth in money supply in 2020 - CBA
Azerbaijan suspends import of live poultry and poultry products from several countries
Pashinyan's confession on Shusha destroys absurd statements of Armenian officials
Anglo Asian Mining restores its contract areas in formerly occupied lands of Azerbaijan
Half of Azerbaijan's population economically active as of 2020
Azerbaijan disseminates footage from Kendyeri village of Kalbajar district (PHOTO/VIDEO)
TANAP’s gas supplies exceed 9 bcm
U.S. weekly jobless claims decline moderately
Georgian Sweeft Digital company to cooperate with Berlin-based software company in open banking field
Flydubai resumes flights to Georgia
Construction of KAMAZ service centers in Turkmenistan to allow implementation of new projects
SOCAR Aviation starts supplying fuel to Izmir Adnan Menderes Airport
Standard & Poor's predicting growth in Azerbaijani Pasha Bank's 2021-22 capitalization
Turkish YDA Holding constructing multidisciplinary hospital in North Kazakhstan
Total cost of cars exported by Georgia to Azerbaijan down
Reforms in real sector of economy to be main drivers of Uzbekistan’s economy in 2021
Georgia reduces imports of building materials from Azerbaijan
Iran's Sefiddasht-Shahrekord railway project progressing
Azerbaijani population’s nominal income down in 2020
Kazakhstan decreases petroleum oils export to Lithuania amid COVID-19
Azerbaijan confirms 770 more COVID-19 recoveries
No Tsunami risk after 7.0 magnitude quake at sea near Philippines
Number of new apartment transactions down in Georgia's Tbilisi - Colliers International
Azerbaijan shows footage from Dordchinar village of Fuzuli district (PHOTO/VIDEO)
KAMAZ, Turkmenistan work to expand supply, technical support of vehicles in country
Asset quality of Georgian TBC Leasing' deteriorates in 9M2020
Samarkand region leads in total production volume of Uzbekistan’s agriculture, forestry and fisheries fields
Georgia reduces export of cattle to Azerbaijan
Volume of passenger traffic by all vehicles in Azerbaijan down
Azerbaijani minister denies possibility of selling SOCAR’s shares
Azerbaijani ministry talks about project of North-South international transport corridor
Azerbaijan sees decline in 2020 alcoholic, tobacco production
All news